Finding the right property to invest in requires years of experience. It goes beyond just the location of the property, and it takes a trained eye to seek out the best investments.
If you are thinking about investing in a property, we want to offer some great tips on finding the best rental possible. Here are three characteristics we use at Holdfolio to determine if we want to invest in a rental property.
3 Things to Look for in a Rental Property and What to Avoid
1. A Substantial Amount of Cash Gain from Day One!
Robert Kyosaki, a well-known American investor and entrepreneur, once said it is imperative to make money when you buy a property. This way from the start there is no need to play a game of catch-up. You can lose a lot of money if there is the need to invest in improvements immediately upon buying a property.
What to Avoid: Properties that have a negative cash flow from the start when there is a mortgage involved.
2. In-Depth Look at Location
Thanks to the internet, it is easier than ever before to research every aspect of the location of your property. You can use websites like City Data or Zillow to do in-depth research on everything from the crime to the walkability of a neighborhood.
What to Avoid: Even if you find a property that is in a good area, it is important to check out the schools. No one wants to bus their kids to a school with a bad reputation if they can avoid it.
3. Condition of the Property
The structural soundness of the property is very important to check out. Take a look at the roof, foundation, walls, chimneys, etc. If you do not know what to look for during a home inspection, bring in a trusted inspector to check out the property with you.
What to Avoid: Properties with long-term repairs that send your cash flow in the negative due to ongoing maintenance.
Still Not Sure?
Investing in a rental property is no easy task. Make sure not to settle on the first reasonable prospect, but the property that is right for you. With enough patience and know-how you’ll be seeing a ROI before you know it.